Credit Suisse Not Liable for Saudi Investor’s Loss

A Credit Suisse Group AG (CS) unit wasn’t
negligent when it advised a Saudi Arabian investor who lost $31
million on structured notes after failing to make a margin call,
a London judge ruled.

Basma Al Sulaiman’s decision not to cover a $10 million
margin call from Credit Suisse following the collapse of Lehman
Brothers Holdings Inc. in 2008 was “irrational as to be
incomprehensible,” Judge Jeremy Cooke said in his written
ruling on the dispute handed down today.

The Saudi national was given about $40 million in a 2003
divorce settlement with Walid Al Juffali, a member of one of
Saudi Arabia’s richest families, according to the ruling. Al
Sulaiman invested some $28 million of her money into 23
structured notes from Credit Suisse Securities Europe Ltd. and
Plurimi Capital LLP, almost all of which were leveraged by loans
from the bank.

The case “illustrates the lack of foundation for her
complaints and the irrationality of her attempts to hold others
liable for her own risk-taking, the market collapse of October
2008 and her own decision not to take the obvious course when
presented with margin calls,” Cooke said in the ruling.

Al Sulaiman had said that, following publicity about her
divorce from the Saudi Cement (SACCO) Co. executive, she was “beset by
banks and others like vultures, all of whom wanted to aid her in
investing her settlement monies,” according to Cooke’s ruling.

Paul Howcroft, a lawyer for Al Sulaiman, declined through a
law firm spokeswoman to comment. Credit Suisse also declined to
comment.